A ‘functioning’ housing market has arrived, report suggests
Several consecutive months of falling asking prices and rising pending sales indicate that sellers are pricing to meet the market — and finding buyer interest.
More homesellers appear to be pricing their properties at levels that reflect the housing market's sluggish pace, a new report indicates.
The median home asking price has dropped 2.5% compared to a year ago — the biggest year-over-year decline since 2017, according to Realtor.com's June housing report. The share of home listings with a price reduction has also fallen 1.9% year-over-year.
Meanwhile, pending sales rose 3.7% compared to June 2025 and the amount of time that homes are spending on the market has stopped rising year-over-year for the first time since 2024.
Eight consecutive months of falling asking prices and seven straight months of rising pending sales are not contradictory data points, noted Danielle Hale, chief economist at Realtor.com.
"Sellers are reading market conditions and are pricing accordingly from the start rather than listing high and cutting later, and buyers are taking note and making bids. This is a welcome sign that we are in a functioning market," Hale said.
Regional differences still at play: There are, however, sharp regional differences to the downward asking price trend.
"In the West and South, prices gave ground back as affordability limits were tested. In the Midwest and Northeast, supply stayed tight enough and demand strong enough that prices kept climbing even through a historic rate shock," said Jake Krimmel, senior economist at Realtor.com.
"The national number hides two opposing trends under the surface," Krimmel added.
Inventory growth continues to slow: Inventory in June was 4.1% higher than in May and up 1.9% compared to June 2025. But year-over-year growth has "decelerated slightly," the report said, with the "gradual cooling trend" that began in the spring of 2025 ongoing.
Seasonal slowdown expected: Summer vacations and holidays usually bring about a period of slowing housing market activity. June data already indicates that a downshift is coming, though Krimmel expects the slowdown to be seasonal rather than the kind of market stall seen last summer.
"We'll be watching whether homes start sitting longer, whether price cuts accelerate beyond the usual summer ramp up, and whether new listings genuinely pull back or just flatten out," Krimmel said.